Raymond James: Johnson & Johnson Has 'Innovation'
In a report published Thursday, Raymond James analysts maintained their Outperform rating on Johnson & Johnson (NYSE: JNJ). The price target was raised from $108 to $111. The analysts expressed greater confidence in the company's long-term growth outlook.
Despite the headwinds associated with biosimilar Remicade, the analysts expressed their optimism regarding the company's new product launches and the quality of its pipeline, which is expected to drive at least mid-single digit growth in the company's Pharma franchise.
"Management is growing the business through innovative new products that address large and growing end markets," the analysts said.
For the past four years, Pharma have been the primary growth driver for Johnson & Johnson, driven by 14 new product launches since 2009. While the global pharma market is expected to grow at 3 percent CAGR over the coming five years, the analysts expect the company's pharma segment to witness growth in the 7 percent range.
In addition, Johnson & Johnson has a rich pipeline, the impact of which is likely to become visible in about 18 to 24 months. The company plans to file more than 10 new molecules with the FDA by 2019, each of which is expected to potentially generate annual sales worth $1 billion.
"While the filings are back-end loaded (four in 2019), J&J did accelerate the timeline on daratumumab (for multiple myeloma) by a year and will now file in 2015 based on phase 2 data. This product has breakthrough status with the FDA and could be launched in 2H16," the Raymond James report stated.
Johnson & Johnson also has plans for more than 40 line extensions for its existing drug portfolio, while being confident about the potential of Remicade, despite biosimilar competition.
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